Depending on your circumstances, there are different ways to get a mortgage. One way is through a traditional mortgage lender, but other options are available. Non traditional mortgage lending can be a great choice if you need more options in order to qualify for a mortgage.
- Flexible payment schedule
An example of the payment flexibility that nontraditional loans offer is the option to have an interest only payment. With traditional loans, every time you pay your mortgage a portion is applied to principal and the rest to interest. With an interest only mortgage, you have a lower payment than a traditional one because you do have to pay down the principal balance However, this may also have some downsides. For example, you’ll never pay down the initial amount you borrowed if you only make an interest only payment.
For some consumers, a flexible payment schedule may be the best way to purchase a home. If you have a seasonal income that can be difficult to predict, are a commission only employee, or one that’s get a large yearly bonus but has a lower salary, a flexible payment schedule may allow you to buy a home easier than originally thought possible. The key to choosing a flexible payment schedule is to assess your financial situation.
- Lower monthly payments
Whether you are planning to buy a home or have been considering investing in real estate, non traditional mortgage lending can be a great way to achieve your goals. These loans often allow for a higher loan amount, shorter loan term, and lower monthly payments. Some of these products can have higher interest rates than traditional mortgages, so it is important to evaluate your needs before applying.
There are several non-traditional mortgage loans, including interest only loans, balloon loans, and hard money loans. Each loan type has its advantages and disadvantages. The main advantage of non traditional mortgage lending is the flexibility it offers, but this flexibility can also be dangerous. When combined with high-interest rates, it can be hard to manage the loan and keep it from falling into default.
There are many positives to non-traditional mortgage lending. The benefits are just a taste of what is available when working with a company specializing in this type of lending. If you’re considering purchasing a new home or refinancing your current mortgage, explore all options and ask about non traditional lending.